The other new Yankee Stadium

On Friday, a few hours before the Yanks’ classic ALDS Game 2 victory, ESPN.com unleashed a rather interesting Outside the Lines on us. Wright Thompson went quasi-undercover to experience the $2500 $1250 Legends Seats at the new Yankee Stadium, and he wrote a treatise on sports ticket prices. He piece goes a long way toward explaining why the Yanks’ premium seats were priced so high, why the prices will crash and whether or not this experiment in ostentatious stadium experiences was a success.

Generally, we know the story. In April, the Legends Suites were embarrassingly empty and not until the Yanks halved the sticker price did the seats start to fill up. Meanwhile, Thompson, who bought his one seat on StubHub, got just a print-out to show for it. For $1250, he doesn’t even get a real ticket stub. This trend in digital ticketing, writes Thompson, is just one part of the death of fan faithfulness. How can you make an archive of ticket stubs if all you have is a black-and-white 8.5×11 print out?

As Thompson explores the champagne and Chilean turbot that Legends fans can enjoy, he talks about how Wall St. created this new Yankee Stadium seating monstrosity. The demand created by a flush Wall Street fed the Yankee Stadium ticket market throughout the late 1990s and into the 2000s. Seats in the lower ring became more and more expensive simply because firms were willing to pay for them. But the Yankees, says Thompson, overplayed their hand:

In the same way, the use of tickets has changed, though it has less to do with the market collapsing and more to do with the Fidelity guys getting busted. You can probably guess what happened next: a proposed SEC rule governing expenses that could forever alter the way Wall Street entertains. To get out front of the SEC, many firms have instituted their own internal controls requiring gifts worth more than $100 to be reported. A computer program has been purchased by more than 200 companies that, for the first time, allows statistics to be kept on ticket use, including how much business each one brings in.

So … just as companies were trying to limit extravagant spending, the Yankees came out with the most extravagant tickets in the history of sports, designed in part for a group of people who could no longer buy them. “They killed the golden goose,” a former Bear Stearns guy says. “When the new prices came out, everybody said, ‘Are you kidding? We can’t even give these to clients.'”

Why? Well, first of all, the sell-side guys now face greater scrutiny about what they can gain by using the tickets. I talked to one Barclays big shot who explained it like this: “The real issue is: Do you want to go to the trouble of taking your client to the Yankee game when you know your boss has an expectation of what’s supposed to come out of the game that’s different than what the client has. Before, the firm’s expectations were low because the investment was low and the client’s expectations were low. Now we’re laying out eight grand on these tickets and you get paid on a 10 percent rate. That’s 80 grand worth of commissions that needs to get done before you get back to even. And 80 grand of commissions at 2 cents a square, in the equity business, what’s that, 4 million shares of stock? If this client does 4 million shares of stock with you, then you’ve made your investment back.”

Second, the buy-side now believes the tickets cost so much that they’d feel a quid pro quo. Yankees games went from something small to something like a trip to the Masters. One buy-sider told me: “I’ve been offered really good seats a couple of times, but I haven’t taken tickets from a broker in the new stadium. I’d feel like I owed the guy.”

As the piece goes on, we know where it’s going. Thompson talks to Louis Gimble IV, a hops magnate whose family had owned Yankee Stadium season tickets since the Great Depression. The Yanks wanted to move Gimble and up his per-game ticket price from the unaffordable $225 to the outrageous $900 level.

In the end, I know where I want to be. I’ve grown to like the new park. While I was opposed to it at first, the stadium is here for good. I’ll stick with what Thompson calls the “regular fans” in the 400 level. Those are my seats.

Meanwhile, the Yankees will have to come to terms with a failed experiment. They couldn’t get $2500 a seat and are already reducing next year’s ticket prices for the Legends Suites. It was worth a shot, but the bad economy, market regulation and the economics of commission-driven deals on Wall Street eluded the stadium planners. Greed might have suited Gordon Gecko, but the Yankees will be subject to the whims of the open market when it comes to pricing their tickets.